Hard to believe it's been five years. On October 19, 2021, BITO started trading, and everyone treated it like the big moment had finally arrived. A billion dollars poured in within two days.

But it didn't hold bitcoin. It held CME futures. After years of turning down spot ETFs, the SEC finally approved one, and it was a wrapper around derivatives.

People who bought it learned what contango is the hard way. Every month the fund rolled its futures, every roll cost a bit, and over time BITO fell well behind actual BTC. You paid a fee to underperform the thing you thought you owned.

To be fair, it probably did help. It showed there was huge demand, and that made it harder to keep blocking spot products, which we eventually got in January 2024. Now those funds hold a big chunk of the supply.

I keep going back and forth on how to feel about it. Was BITO a necessary step, or just a toll booth for people who didn't want to learn self-custody?